Supreme Court To Weigh Copyright Case On Resale Of Foreign-Made Goods

04/16/2012 | 03:30pm US/Eastern

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By Brent Kendall
Of

The Supreme Court agreed Monday to hear a copyright infringement case involving resold textbooks that could have significant implications for discount stores and other vendors that resell foreign-made goods.

At issue are lower court rulings that found an entrepreneurial college student liable for copyright infringement for reselling foreign-edition textbooks on eBay. Supap Kirtsaeng asked friends and family in Thailand to buy copies of the textbooks, where they were cheaper. He says he resold them in the U.S. and used the profits to help pay for his U.S. education.

Textbook publisher John Wiley & Sons Inc. sued Kirtsaeng and won a $600,000 copyright infringement judgment against him. Courts rejected Kirtsaeng's defense that he was protected by the "first-sale" rule in U.S. copyright law, which generally holds that a manufacturer can't restrict the resale of a product once it has sold the product a first time.

Wiley said it never authorized the foreign-edition copies to be sold in the U.S.

An appeals court said that first-sale rule didn't apply to goods that were produced outside the U.S. The Supreme Court will review that ruling, marking the second time in recent years the high court has tried to resolve this issue.

The justices split 4-4 on the legal question in a 2010 case involving Costco Wholesale Corp. The tie was possible because Justice Elena Kagan was recused in the case, having worked on it while she served as U.S. solicitor general.

In that case, Omega SA, a unit of The Swatch Group, alleged that Costco violated U.S. copyright law by selling Omega Seamaster watches it obtained from third parties who had imported them into the U.S.

Amazon.com Inc., Target Corp., Google Inc., eBay and various retailing groups filed briefs supporting Costco, warning that Omega's position could threaten companies that resell foreign-made goods and lead to higher prices for consumers. Retailers noted that many products they sell are first produced and procured from abroad.

The software, publishing, movie and music industries, seeking to protect the strength of their own U.S. copyrights, filed legal briefs supporting Omega in that case.

All nine justices are participating in the textbook case. Ebay and a trade group of retailers again filed briefs with the Supreme Court, urging the justices to hear the student's appeal.

The case is Kirtsaeng v. John Wiley & Sons, 11-697. Oral arguments will take place in the fall.